PROBLEM 5 - Cost Variance Zara, Inc. manufactures a special fabric, used to produce suits. Zara's actual activity for the past month follows: Materials purchased Materials used Direct labor Total manufacturing overhead Production 18.000 meters at Rp9.500 per meter 9.500 meters 2.100 hours at Rp62.500 per hour Rp110.800.000 (Rp80.500.000 variable cost and Rp30.300.000 fixed 500 units The company applies standard cost system and the standard costs are detailed as follows: Direct material, 20 meters at Rp 9.000 per meter Rp 180,000 Direct labor, 4 hours at Rp60.000 Rp 240,000 Manufacturing overhead applied at five-sixth (5/6) of Rp direct labor cost (variable costs = Rp150.000; fixed costs 200,000 = Rp50.000) Total unit costs Rp 620,000 Standards have been computed based on a budgeted activity level of 2.400 direct labor hours per month. Required: 1. Prepare variance analysis for: a. Direct material b. Direct labor C. Variable manufacturing overhead d. Fixed manufacturing overhead 2. Based on variance analysis in 1, give some comments about Zara's operations for the past month and some possible yet logical explanations for the variances that Zara experienced.